UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 40859 / December 29, 1998
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1093 / December 29, 1998
ADMINISTRATIVE PROCEEDING
File No. 3-9797
________________________________
:
: ORDER INSTITUTING A
In the Matter of : PUBLIC PROCEEDING AND
: OPINION AND ORDER
STEVEN M. GROSS, CPA, : PURSUANT TO RULE 102(e)
: OF THE COMMISSIONíS
Respondent. : RULES OF PRACTICE
:
________________________________:
I.
The Securities and Exchange Commission (Commission) deems it
appropriate and in the public interest that a public
administrative proceeding be, and hereby is, instituted against
Steven M. Gross (Gross) pursuant to Rule 102(e) of the
Commissionís Rules of Practice.[1]
II.
In anticipation of the institution of this proceeding, Gross has
submitted an Offer of Settlement (Offer), which the Commission
has determined to accept. Solely for the purpose of this
proceeding and any other proceedings brought by or on behalf of
the Commission or to which the Commission is a party, Gross
consents to the issuance of this Order, the entry of the findings
contained herein, and the imposition of the sanction set forth
below without admitting or denying the findings or conclusions
contained herein except that he admits (1) the Commissionís
jurisdiction over him and the subject matter of this proceeding
and (2) the entry of the permanent injunction against him
described in Section III. C. below.
III.
The Commission makes the following findings:[2]
A. Respondent
Steven M. Gross, age 37, is a certified public accountant
who was licensed in the State of Missouri. Gross was the
assistant controller for Oliver Transportation, Inc. (OTI) from
January 1994 until September 1994, when he was promoted to OTIís
chief financial officer (CFO). Gross was the companyís CFO until
his resignation in June 1995.
B. Oliver Transportation, Inc.
OTI was a Delaware corporation, headquartered in Mexico,
Missouri. It provided freight transportation services throughout
the United States through a fleet of more than 600 flatbed
trucks. During the relevant period, OTI was registered with the
Commission pursuant to Section 12(b) of the Exchange Act, and was
required to file periodic reports with the Commission pursuant to
Section 13(a) of the Exchange Act. During the relevant period,
the companyís common stock was traded on the Boston Stock
Exchange and quoted on the Nasdaq Small Cap Market. In August
1995, OTI ceased business operations, and its stock was delisted.
C. Facts
By judgment of the United States District Court for the
Eastern District of Missouri, Gross is permanently enjoined from
violating Sections 10(b) and 13(b)(5) of the Exchange Act and
Rules 10b-5, 13b2-1, and 13b2-2 thereunder. SEC v. John F.
"Pete" Oliver et al., Civil Action No. 2:98CV75 (DJS) (E.D. Mo.,
consent judgment entered Dec. 23, 1998). The Commissionís
complaint, filed on December 16, 1998, alleged, among other
things, the following: Beginning in February 1993 and continuing
through at least June 1995, senior management and others employed
by OTI perpetrated a scheme whereby phony customer orders and, in
turn, phony accounts receivable were recorded in OTIís books and
records. As a result of the scheme, the financial statements and
other disclosures in OTIís registration statement in June 1993
and subsequent periodic filings with the Commission were
materially false and misleading. In furtherance of the scheme,
while he was employed by OTI, Gross made or caused the making of
materially false and misleading accounting entries in OTIís books
and records and provided false information to the companyís
independent auditors in connection with the audit of OTIís
financial statements. Gross, as the companyís CFO, also prepared
and signed OTIís annual report on Form 10-K for its fiscal year
ended September 30, 1994 and quarterly reports on Form 10-Q for
its first and second quarters ended December 31, 1994 and March
31, 1995, filed with the Commission. In connection with these
filings, Gross knew or was reckless in not knowing that each
contained materially false and misleading information because
OTIís financial statements included phony accounts receivable.
IV.
Based on the foregoing, the Commission deems it appropriate
and in the public interest to impose the sanction specified in
Grossís Offer.
Accordingly, it is ordered that, effective immediately,
Gross is denied the privilege of appearing or practicing before
the Commission as an accountant.
By the Commission.
Jonathan G. Katz
Secretary
**FOOTNOTES**
[1]: Rule 102(e)(3)(i), in relevant part, provides that the
Commission may suspend from appearing or practicing before it any
accountant who by name has been permanently enjoined, by a court
of competent jurisdiction in an action brought by the Commission,
from violating any provision of the federal securities laws or
the rules and regulations thereunder. 17 C.F.R.
ß201.102(e)(3)(i).
[2]: The findings herein are made pursuant to Grossís Offer and
are not binding on any other person or entity in this or any
other proceeding.